Allergan Australia Pty Limited v Cat Media Pty Limited

[2003] FCA 1208

FEDERAL COURT OF AUSTRALIA

Allergan Australia Pty Limited v Cat Media Pty Limited

[2003] FCA 1208

ALLERGAN AUSTRALIA PTY LIMITED v CAT MEDIA PTY LIMITED
N 1301 OF 2003

WHITLAM J
5 SEPTEMBER 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1301 OF 2003

BETWEEN:	ALLERGAN AUSTRALIA PTY LIMITED APPLICANT
AND:	CAT MEDIA PTY LIMITED RESPONDENT
JUDGE:	WHITLAM J
DATE OF ORDER:	5 SEPTEMBER 2003
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The parties bring in short minutes of proposed order consistent with these reasons for judgment.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1301 OF 2003

BETWEEN:	ALLERGAN AUSTRALIA PTY LIMITED APPLICANT
AND:	CAT MEDIA PTY LIMITED RESPONDENT

JUDGE:	WHITLAM J
DATE:	5 SEPTEMBER 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. The applicant is the Australian subsidiary of a company that manufactures and distributes a product called Botox.  The applicant is the exclusive distributor in Australia of Botox.  Botox is a prescription medication approved by the Therapeutic Goods Administration which is used for the treatment of cerebral palsy and glabellar frown lines.  Botox is administered by injection and is available only from doctors.  It has been clinically proven to decrease the severity of glabellar frown lines by relaxing wrinkle-causing muscles, leading to more youthful appearance.

2. The respondent supplies various cosmetic and therapeutic goods for sale in chemists and other retail outlets.  One product which the respondent supplies is called Relaxaderm, which was released into the Australian market in July 2003.  Relaxaderm is a cream which, when applied, is intended to reduce wrinkles.

3. The applicant claims that parts of the advertising and promotional material used by the respondent are, in broad terms, likely to mislead and deceive in contravention of s 52 of the Trade Practices Act 1974 (‘Act’). It is against that rubric, supplemented by considerations under s 53(c) of the Act, that the present claim for an interlocutory injunction restraining the respondent from making specified representations has been made. It is important to bear in mind that the interlocutory relief sought is against the background and framework of the final relief sought in the proceedings by way of injunction.

4. I will not attempt to describe in detail the course of correspondence between the parties to date because of the time and urgency of the application.  However, I think it is fair to say that the respondent has made admissions, in a grammatical rather than legal sense, that some of its advertising material may have involved statements which could be characterised as over-reaching, in particular, the use of the expression ‘clinically proven’ and the suggestion, by use of the word ‘similar’, that Relaxaderm has the same therapeutic value and effects as Botox.

5. The applicant promptly took objection to the product marketed by the respondent being called ‘Relaxaderm-Btx’.  That objection has been accommodated and the packaging of the product altered accordingly.  No present complaint is made about that although the earlier point of sale advertising materials still of course employ that description of the product.

6. The present dispute for the purposes of this urgent application boils down to the advertisements of the respondent in three particular forms.  First, the proposed advertisement for display at points of sale marked Exhibit A for the purposes of this proceeding.  Counsel for the applicant has outlined a number of bases (to which I will return ) on which it is said that this poster is likely to mislead or deceive.  Second, objection is taken to the form of a newspaper advertisement which is marked Exhibit B and which has already appeared in the 24 August 2003 issue of the Sunday Telegraph newspaper.  It is proposed to repeat publication of that advertisement in the same section of that newspaper later this month.  Finally, objection is taken to the existing point of sale material, copies of which have been marked Exhibits D and E.

7. The submissions about misleading or deceptive conduct commence with consideration of the existing point of sale material.  Counsel for the applicant submits that the material makes representations that Relaxaderm is as efficacious as Botox, is comparable to Botox and is scientifically or clinically proven.  The advertisement, which is in the form of a poster, contains under the large heading ‘Better than Botox?’ the statement ‘What if a cream could give similar results.  …’.  At the bottom, beneath the reference to the respondent’s product referred to as ‘Relaxaderm-Btx Injection Free Facial Relaxer’ is the statement ‘Clinically proven to reduce the appearance of wrinkles by up to 50% in 30 days’.  I accept that the material in that form, including the general impression of the material, the words ‘What if a cream could give similar results. …’, and the expression ‘[c]linically proven’ (which is the kind of language one might readily associate with a medical procedure) could convey the representations alleged in the amended application for an interlocutory injunction.   (I interpolate to say that there is a complaint made by the respondent, which I think would have justification if we were proceeding to trial at the moment, that there is no great specificity given in fact to the representations alleged against it.)  Nonetheless, there is a serious case to be tried in respect of that material and it is part of the background material which the Court considers in relation to the other material, being the later newspaper advertisement and new point of sale material. 

8. The newspaper advertisement is different to the point of sale materials.  It does not appear to refer to Botox by name, nor is there any reference to ‘similar results’ .  Counsel for the applicant builds his case on a particular paragraph in the following terms:

   ‘Introducing injection free Relaxaderm

   Relaxaderm is a breakthrough in cosmetic skincare technology and is being called the “injection free alternative”’

   The above paragraph, counsel submits, prompts the question ‘alternative to what?’  It is submitted that the answer is ‘alternative to Botox’ and that it is misleading or deceptive to suggest that Relaxaderm is an alternative to Botox when regard is had to the clinical trials, referred to in the exhibits to the affidavit of Dr Napier-Flood.  Counsel also draws attention to the similarities in layout between the newspaper advertisement and the existing point of sale material, in particular, pictures taken by confocal laser showing the level of wrinkles before use of the respondent’s product and after 15 and 30 days of use.  It was submitted that these similarities leave the same impression in the minds of the consumer as that with respect to the existing point of sale material.

9. I think that there is a serious question to be tried as to whether the newspaper advertisement is misleading or deceptive.  However, the strength of this aspect of the case is less than that relating to the existing point of sale material.  That is a matter that affects the determination of the question of whether the balance of convenience favours the granting of an interlocutory injunction at this stage and if so, the form of that relief.

10. The material in Exhibit A is a proposed new poster for display at points of sale.  Counsel for the respondent are prepared to give an undertaking for the purposes of this interim relief only that the respondent will produce and distribute the material without the paragraph at the bottom which reads:

    ‘Of course it’s not the same as a Botox injection as Relaxaderm, a luxurious cream, requires no needles and no doctor.  And just think what you have to look forward to . . . visible reduction in wrinkles, smoother, fresher, younger looking skin!’

    I understand why that undertaking would be given.  Despite being a conclusion that a grammarian would come to more easily than a casual reader, the passage suggests by use of the clause commencing ‘as Relaxaderm . . .requires no needles’ that the only difference between Relaxaderm and Botox is the latter’s application through injection.  I bear that undertaking in mind in coming to a conclusion as to what interlocutory relief is appropriate. 

11. The undertaking is entirely unacceptable to the applicant.  The applicant submits that the material is so likely to mislead or deceive that interlocutory relief ought to be granted despite the undertaking.  In particular, it relies on the expression at the top in bold ‘Look younger without Botox!’ and the picture of a woman with the needle of a syringe positioned just at the edge of her left eye, which is shown clearly in Exhibit A.

12. The proposed point of sale material, in terms of general layout, looks quite similar to the existing point of sale material.  Both include the three pictures taken by confocal laser.  Against that it should be said that the proposed advertisement includes an image of the new packaging of the product, as opposed to the picture of the old packaging containing the old name of the product.  This is something which counsel for the respondent rely on heavily.  The course of correspondence between the parties shows that the picture of the new packaging and the inserts in the packaging has been the subject of negotiation between the parties and that is plainly something that is relevant in determining the balance of convenience of any relief sought to be granted.

13. Counsel for the applicant emphasises that his client is less concerned with the fine detail of the contents of the inserts and packaging than with the point of sale advertisements.  Again, I think that there is a serious question to be tried whether the proposed material is misleading or deceptive or likely to mislead or deceive because of the express mention of Botox.  I pause to say that at the bottom of the advertisement, preceded by an asterisk, is the statement ‘Relaxaderm is not a cosmetic cream and is not a substitute for medical procedures’.

14. Nonetheless, I am bound to say again that I think it a much less strong case than that relating to the existing point of sale material.  I think it less likely that anybody reading the proposed advertisement will think that Relaxaderm, a facial cream purchased in a retail outlet for a comparatively small amount of money, is likely to achieve the same results as a product which must be administered by a doctor and which the evidence shows is in a different price category entirely.  Unlike the existing poster, there is no express suggestion that Relaxaderm has a similar efficacy to Botox.  I should mention also that the respondent is prepared to give an undertaking that at the time of distributing the new advertisement in accordance with its undertaking to the last paragraph that it will request the return of the existing point of sale material.  Although Ms Amoroso, the managing director of the respondent, says in her affidavit that it may be the case that not much of the existing point of sale material is returned, as a matter of common sense it is much more likely that the new point of sale material would be displayed in place of the old material for two reasons.  First, it contains a picture of the new packaging with the new name ‘Relaxaderm’ and secondly the more dramatic picture of the woman with the syringe appears.  It is plainly stated by Ms Amoroso that it is a marketing advantage to have a cream rather than something which involves, in the minds of some people, the pain of injections.

15. Both counsel have reminded me of the authorities on this topic, in particular, counsel for the respondent draw attention to what was said by the Full Court and in particular Heerey J in Gillette Australia Pty Ltd v Energizer Australia Pty Ltd (2002) 193 ALR 629. That case is a timely reminder about the need for caution in relation to comparative advertising, and particularly where comparative advertising is not of apples and pears or oranges and lemons, however one puts ‘like with like’. One should not underestimate the intelligence of the average consumer.

16. In addition, there is material exhibited to Ms Amoroso’s affidavit that shows there is a large range of products of all sorts with all kinds of claims about the way in which they may improve the appearance of a person’s skin.  As I have emphasised, a person would think that there is a fundamental difference between a skin cream and a product that is administered by a doctor by injection.  The balance of convenience on both sides is fairly speculative. 

17. There is a suggestion in Ms Amoroso’ affidavit that a restraint on the respondent’s advertising activities at this stage would come at a bad time.  There is no particular detail given of that although there is currently a relatively well known controversy involving at least one company involved in the manufacturer of goods which are sold in health food stores and other places where the respondent’s product is sold.  It may be that there is some peculiar urgency arising out of this. 

18. Nonetheless, I think that on both sides, each party simply wants to maximise its market share.  From the point of view of the applicant, there is no specific material to suggest that the continued sale of Relaxaderm through the use of the proposed advertising material is likely to have any particularly deleterious effect on its business.  I rather doubt that it would.  Nonetheless, if the conduct is likely to have any impact on its business, the applicant wishes it to stop.  On balance, it is difficult to disentangle the seriousness of the question to be tried from the balance of convenience.  Ultimately, I think the most appropriate course is to grant relief in the terms offered by the respondent.

19. My view is that the advertisement in the Sunday Telegraph ought not to be restrained.  As for the proposed poster in Exhibit A, if the paragraph set out at [10] were omitted, I would not be inclined to restrain its distribution.  Bearing in mind that the respondent proposes to distribute the new poster very soon given the new packaging which it displays, I note that the respondent undertakes to request the return of the existing point of sale material in Exhibits D and E at the same time as distributing the new material. 

20. Plainly I can only impose those orders upon the respondent upon the giving of the usual undertaking as to damages by the applicant.  The applicant may not wish to do that if the restraints are confined to the editorial adjustment to Exhibit A before its distribution pending the further hearing of the matter. 

21. Accordingly, the only order that I make at this stage is that the parties bring in short minutes of proposed order consistent with these reasons for judgment.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam.

Associate:

Dated:             30 October 2003

Counsel for the applicant:	M J Darke
Solicitors for the applicant:	Minter Ellison
Counsel for the respondent:	D M Yates SC and H W D Stowe
Solicitors for the respondent:	Clayton Utz
Dates of hearing:	4 and 5 September 2003
Date of judgment:	5 September 2003